Gold continues fall amid tapering fears
London (Dec 12) Gold took another turn lower in electronic trade Thursday, as a lingering fear that the Federal Reserve could scale back its stimulus next week added pressure on metals prices.
Midmorning in Europe, gold for February delivery was trading down $15.10, or 1.2%, at $1,242.00 an ounce. March silver lost 42 cents, or 2%, to $19.94 an ounce.
A day earlier, gold futures had backed away from a three-week high to finish lower for the first time in three sessions as a U.S. budget deal helped dull the precious metal’s appeal.
Standard Bank’s Walter de Wet said that the potential agreement eliminates “another hurdle to economic growth” and increases the chances of a stimulus taper this month. “From a tactical perspective,” he said, “we still believe that gold should be sold into rallies.”
The Federal Reserve is set to convene a pivotal meeting next week to discuss the next move in its bond-buying plan. The quantitative-easing program has helped support dollar-denominated prices for gold so the prospect of a taper has, in turn, put some pressure on the metal’s prices. The dollar index rose to 79.99 on Thursday from 79.877 late Wednesday in North America.
Elsewhere in metals trading, January platinum fell $6.20 cents to $1,379.00 an ounce, while March palladium lost $3.55 to $735.00 an ounce.
High-grade copper for March delivery was flat around $3.30 a pound.